Gold Seeking To Retest Lows?
Today’s Spotlight Market
After a brief run up during the recent spike in volatility caused by the Chinese equity markets, Gold prices have again turned south. Neither the earlier Euro zone uncertainty nor the Chinese market plunge seems to have caused traders to rush into Gold, the traditional ?safe haven? during periods of market uncertainty.
Fundamentals
Gold has been in a 2-year bear market, which has seen failed rallies on the back of various news events. Continued strength in the US economy and labor market has offset political and economic events since the Gold market turned bearish in 2013. A recent U.S. Commodity Futures Trading Commission report showed a drop of 36% in net long positons for the week ending September 8th. This week features the FOMC meeting and the possibility of the long awaited hike in U.S. interest rates. The anticipation of a rate hike has driven the U.S. Dollar higher, and Gold prices tend to be inversely correlated with Gold prices.
Technical Notes? – View Today’s Chart
Turning to the 3-month continuation chart, we see that Gold is now trading under both the 20- and 50-day Simple Moving Averages (SMA).? The 20-day SMA is still above the 50-day SMA, a bullish sign. Traders will be looking to see if the recent down days for Gold will cause the 20-day SMA to again cross below the 50-day SMA. The 14-day Relative Strength Index is in oversold territory at 25.7. Support is found at the 1075 level, which is not too far from the important psychological level of 1000.
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